BILL NUMBER: AB 577	CHAPTERED  09/15/99

	CHAPTER   385
	FILED WITH SECRETARY OF STATE   SEPTEMBER 15, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 15, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	PASSED THE SENATE   AUGUST 24, 1999
	AMENDED IN SENATE   AUGUST 16, 1999
	AMENDED IN ASSEMBLY   APRIL 26, 1999

INTRODUCED BY   Assembly Member Honda
   (Coauthors:  Assembly Members Alquist, Calderon, and Campbell)
   (Coauthors:  Senators Ortiz and Polanco)

                        FEBRUARY 19, 1999

   An act to amend Section 14157 of, and to add and repeal Section
14160 of, the Financial Code, relating to credit unions.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 577, Honda.  Credit unions.
   Existing law, the California Credit Union Law, provides for the
regulation of credit unions by the Commissioner of Financial
Institutions.  Existing law provides that a credit union organized
and duly qualified as a credit union in another state may become a
credit union organized and operating under the laws of this state if
in compliance with certain specified requirements.
   This bill would specifically state that a credit union doing
business in this state is not prohibited from expanding or doing
business in other states, countries, or foreign jurisdictions.
   The bill would require the Commissioner of Financial Institutions
to submit to the appropriate policy committees in each house of the
Legislature on or before January 30, 2000, recommendations for a
comprehensive statutory framework to permit foreign credit unions to
operate in this state and to provide for the regulation and
supervision of foreign credit unions operating in this state.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14157 of the Financial Code is amended to read:

   14157.  (a) A credit union organized and duly qualified as a
credit union in another state of the United States shall become a
credit union organized and operating pursuant to this division if in
compliance with each of the following requirements:
   (1) The credit union has filed a statement with the Secretary of
State pursuant to Section 2105 of the Corporations Code.
   (2) The commissioner has approved an application filed by the
credit union that has not been suspended or revoked.
   (3) The interest rate of the credit union on loans made to members
residing in this state does not exceed the maximum interest rate
permitted by the jurisdiction under whose laws it is organized.
   (4) The credit union has obtained bond or insurance coverage as
prescribed in Section 14409.
   (5) The credit union has obtained insurance or guaranty for its
members' share accounts as prescribed in Section 14858.
   (6) The credit union submits an annual audit report to the
commissioner as prescribed in Article 2 (commencing with Section
14250) of Chapter 3.
   (7) The credit union pays the cost of examination or services
performed in accordance with Section 14353.5.
   (8) The credit union pays to the commissioner an annual fee of two
hundred fifty dollars ($250).  The credit union is not subject to
Section 14350, 14351, or 14352.
   (b) For the purpose of implementing the provisions of this
section, the commissioner may cooperate with the administrators of
the credit union laws of other states and the commissioner may share
with them information received in the administration of this
division.
   (c) The commissioner may disapprove an application filed pursuant
to this section, or upon reasonable notice and opportunity for
hearing suspend or revoke approval of an application, if the
commissioner finds that the standards of organization, operation and
regulation of the credit union, including, but not limited to, the
laws and regulations of the jurisdiction in which it is organized, do
not reasonably conform to the standards of organization, operation
and regulation established pursuant to this division, or that 50
percent or more of the members of the credit union are, or are
reasonably expected to be, residents of this state.
   (d) Nothing in this section shall prohibit a credit union doing
business in this state pursuant to this division from expanding or
doing business in other states, countries, or foreign jurisdictions.

  SEC. 2.  Section 14160 is added to the Financial Code, to read:
   14160.  (a) It is the intent of the Legislature to enact
legislation that would do all of the following:
   (1) Permit credit unions organized under the laws of a foreign
country to conduct the business of a credit union in this state if
authorized by the commissioner.
   (2) Provide for the regulation and supervision by the commissioner
of foreign credit unions doing business in this state.
   (3) Protect the interests of persons living and working in this
state who may become members, borrowers, or creditors of foreign
credit unions.
   (4) Provide for foreign credit unions to transact business in this
state in a safe and sound manner.
   (5) Provide for foreign credit unions to transact business in this
state in accordance with the laws of this state that are applicable
to California state-licensed credit unions, as may be necessary or
appropriate.
   (b) The commissioner shall prepare recommendations for a
comprehensive statutory framework to implement the legislative intent
of subdivision (a), and shall submit the recommendations to the
appropriate policy committees in each house of the Legislature on or
before January 30, 2000.
   (c) This section shall remain in effect only until January 1,
2001, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2001, deletes or extends
that date.
